Orbitz Worldwide Inc. (OWW), an online travel agent, said Chief Financial Officer Russell Hammer resigned last week and will be replaced on an interim basis by David Belmont, vice president of financial planning.
Hammer resigned on May 23 and his last day will be June 1, the Chicago-based company said in a filing today. Hammer, who was previously CFO of Crocs Inc. (CROX), will return to the footwear industry to take the same position at Brown Shoe Co. (BWS), according to a separate release today.
Hammer is leaving amid a transition as Orbitz attempts to lessen its dependence on flights and bolster hotel offerings to vie with larger competitors such as Priceline.com Inc. (PCLN), said Tracy Young, an analyst at New York-based Evercore Partners Inc. (EVR) Orbitz’s revenue from hotels rose 9 percent in the first quarter, compared with a year earlier, while sales from flights were unchanged, the company said in May.
Mike Nelson, president of Orbitz’s Partner Services Group, also resigned on May 23, the company said. The team responsible for global hotel relationships will report to Chief Executive Officer Barney Harford, and the group that oversees U.S. airline, car rental, cruise and insurance partner relationships will report to Chris Orton, president of Orbitz.com and CheapTickets.
“It’s a company in transition, so this is a little disruptive,” said Young in a telephone interview today. Young has an underweight rating on Orbitz stock.
Orbitz jumped 12 percent to $3.85 at the close in New York, before the company’s announcement. It was the biggest rise since Dec. 6. Shares of Brown Shoe dropped less than 1 percent to $11.89.
Orbitz posted a net loss of 6 cents a share in the first quarter, compared with an 11-cent loss a year earlier. Revenue increased 3 percent to $189.8 million, the company said in May.
While the management changes “came out of left field,” they probably won’t be detrimental to the company’s effort to strengthen relationships with hotels, said Brian Nowak, an analyst at Nomura Securities in New York.
“The interim CFO is an internal hire who has been with the company for multiple years, so I don’t know how much incrementally it will make it difficult.”
Belmont will take up the post temporarily on June 2 until the company appoints a permanent successor to Hammer. Belmont will receive a $10,000 per month increase in base salary for each month that he performs the role as well as a performance bonus payment of $50,000, the company said.
Brown Shoe, the operator of the Famous Footwear chain, said Hammer will replace Mark Hood as CFO on June 11.
Hammer’s decision to move to the shoe industry “makes sense” because he previously held a position in the field, Young said. “I don’t really read anything into it,” she said.
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